Tinubu’s £746m Deal With UK Another Debt Trap, Says ADC

The African Democratic Congress (ADC) has described the £746 million agreement signed by President Bola Tinubu during his state visit to the United Kingdom as another debt trap.

Calling it a “mugu deal,” the party said the agreement disproportionately favoured the UK and its economy, while leaving Nigeria with a massive debt.

In a statement signed by its National Publicity Secretary, Bolaji Abdullahi, the ADC said the government has tried to pass off the deal as President Tinubu’s major achievement.

It however said in reality, it is an achievement of the UK Government, which, through this deal, has managed to save its steel industry, protect thousands of UK jobs, and get Nigeria to pay for it.

The opposition party called on the Federal Government to provide full transparency by disclosing comprehensive details of the agreement, including the applicable interest rates, repayment terms, and any local content provisions or obligations associated with the deal.

Stating that the United Kingdom already enjoys a significant balance of trade advantage over Nigeria, the party the government is trying to hoodwink Nigerians with the agreement.

Recall that President Tinubu, during his recent state visit to the UK, signed an agreement with the host country to rehabilitate the Tin Can and Apapa Ports in Lagos.

And while the government claims the deal as a diplomatic success, the ADC said it is, in reality, a commercial loan arrangement.

According to the party, conditionalities attached to the deal will ensure that a substantial portion of the funds either remains within the United Kingdom or is repatriated back to it.

“Based on information available on the UK Government website, which described the deal as a ‘major vote of confidence in UK manufacturing,’ the £746 million agreement will be delivered through UK Export Finance’s (UKEF) Buyer Credit Facility and arranged by Citibank, N.A., London Branch.

“UKEF is the UK Government’s export credit agency. Its Buyer Credit Facility enables foreign buyers to access financing from commercial banks to procure UK goods and services, typically for projects that require significant UK content participation.

“In simple terms, UKEF guarantees a loan obtained by a foreign buyer from a commercial bank, which is then used to pay for UK goods and services, with the bank paying the UK exporter directly on behalf of the buyer,” the ADC stated.

Continuing, the party said, “Under this agreement, at least £236 million of the £746 million in supplier contracts will be awarded to British companies, while British Steel will supply 120,000 tonnes of steel billets under a £70 million contract, representing its largest UKEF-backed export order, for port rehabilitation projects.

“The ADC is particularly concerned that the Nigerian government has entered into an agreement that leaves the country at a clear disadvantage, seemingly in exchange for a few hours of pomp and pageantry, and as part of a broader attempt to secure foreign validation, even as millions of Nigerians continue to face poverty, unemployment, and worsening insecurity.

“There are still several unanswered questions regarding this agreement. These include: what are the repayment terms of the commercial loan, including its duration and applicable interest rate?

“What percentage of local goods, services, and subcontracting is involved in the port rehabilitation project? How many direct and indirect jobs will be created for Nigerians?

“What is the project timeline, and when will the ports become fully operational? What provisions exist for training, apprenticeships, and skills transfer? Finally, what are the limits on expatriate staff, and are there defined quotas for SMEs and community benefit obligations?

“If the APC government has answers to these questions, it should make them available to Nigerians. Otherwise, Nigerians are justified in concluding that, 66 years after independence, President Bola Tinubu has travelled to London to sign an agreement that resembles a colonial-era treaty, one that risks mortgaging the country’s future for limited value and symbolism.”